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Major steel producers that have grounded investments of around Rs 2 lakh crore on their projects in Odisha have urged the state government to step up availability of iron ore and chrome ore and soften steep water charges imposed on the units.
A delegation of the Indian Steel Association (ISA) consisting of steel makers like Tata Steel, Jindal Steel & Power Ltd (JSPL), Essar Steel, Bhushan Steel and Jindal Stainless Ltd (JSL) called on the state chief secretary G C Pati and apprised him on the problems faced by the steel industry.
"The steel industry is facing a very challenging time due to rising imports from China, Japan and Korea. Most of the steel companies are making huge losses. The steel units have invested around Rs two lakh crore in Odisha, creating direct and indirect employment for 200,000 people. Investment of this scale needs support from the state government. We hope that the issue of shortage or iron ore will be sorted out with the reopening of some mines," said Naveen Jindal, chairman of JSPL.
T V Narendran, managing director, Tata Steel said, "This was an introductory meeting that ISA held with the chief secretary. We stressed on the need for government support on all infrastructure related issues."
Sanak Mishra, secretary general at ISA said, "Odisha has seen the most investments in steel sector in the past 12-14 years. Iron ore availability is a major issue here for the steel units. Discussions were held on how to make more ore available to the steel units by stepping up production by Odisha Mining Corporation (OMC). Besides, water and ore transportation charges are quite high and they need to be reviewed by the state government."
Since iron ore and chrome ore availability in the state was low, leading to high prices, the ISA called for enhancing production by OMC and merchant miners and allocation of the two ores by OMC on priority basis to MoU (memorandum of understanding) signed units. The delegation also called for keeping the amount under the proposed District Mineral Foundation (DMF) low to lessen the burden on the steel industry.
On rationalising transportation charges, the ISA urged the state government to take firm steps to curb cartelisation efforts to bring down logistics costs to realistic levels. The steel association hoped that the initiative taken by the government for e-auction of road transportation contracts would rationalise the transportation rates and make the steel producers in the state more competitive.
On water cess, the ISA stated it needs to be as per actual usage and not according to allocation. The proposed one time infrastructure charge of Rs 2.5 crore per cusec should not be loaded on the Industry, it held.
Further, the ISA sought support from the state government to captive power plants of the steel units in terms of timely payment by Gridco, the bulk power purchaser.
"The state government needs to expedite approvals through project monitoring so that enabling provisions being attempted by industry like slurry pipeline, beneficiation plants, private ports, railway sidings and water pipeline are approved in a timely fashion by various government departments", the steel association suggested.
The ISA has been formed by eight major steel producers in public and private sectors with a production capacity exceeding two million tonne per annum.
